Great comments from Ron Kitching.

Those who read the comments section of the online editions of the Australian or Courier Mail will occasionally run into some rather pithy and ‘right to the point’ ones from regular contributor, Ron Kitching. Ron is one of my regular contacts, a friend, and a guy I have got to know well since I worked for him in the early 80s. He was a supporter in my unsuccessful campaign for Bob Katter Senior’s seat in a federal election back then.

Ron was in fact probably one of our first Classical Liberals/libertarians, having freed his mind of the clutches of the state after reading Ayn Rand’s Atlas Shrugged while trying to find out how and why governments could regulate the economy to such an extent that an ostensibly booming industry (like mining) was reduced to penury.

An author, life member of the Mont Pelerin Society, and a major contributor to F.A. Hayek’s lecture tour of Australia in 1976, Ron at 80 years of age still has a great deal to offer. His comment on the article, “Kevin Rudd may give ground to miners,” is telling:

I am annoyed by Rudd’s talking up economic nationalism, insofar as he has been braying that BHP is 40% foreign owned and Rio Tinto is 70% foreign owned. The implication is that foreign owners are enemies and criminals and should be heavily taxed.

Then Rudd claimed in a TV statement that his wonderful reforms would increase exploration and mining by 5% plus. And Treasurer Swan keeps parroting “These are the resources of the Australian people”.

That implication indicates that ALL business resources including farms are the resources of the Australian people.

I thought the remarks of Mac Nichols, in a letter to the press, spot on:

Any of these resource rent or royalty tax legalised plunder initiatives are based upon the premise that mineral wealth is for all to share. Each and every mineral deposit is a testament to our indomitable spirit, is a patentable invention and not a public asset.

A legally plundered mining royalty is identical to the concept of a government demanding a tax from a current model Intel Computer CPU, as the ideas were always there, it just happened to be Intel that discovered them.

And again the following:

I well remember how Whitlam’s reign wrecked Australia’s Exploration and mining industry during and for long after his disastrous term.

There is no such thing as a windfall profit. Huge profits indicate that a producer is serving his customers well. The social benefits of profits are that they generate new capital.

New Capital generates exploration activity.  Profits also induce competitive producers to enter production.

The Rudd government’s Resource rent tax is a capital destroying exercise and as such becomes a job and production destroying activity.

It also leaves countless millions of tonnes of otherwise productive ore in the ground. Low-grade producers are wiped out completely.

7 thoughts on “Great comments from Ron Kitching.

  1. I don’t think mining profits are part of economic rent, not technically. Especially when “super profit” is defined as “rent”, which can mean you are either very efficient or are benefitting from a cyclic or structural boom.

  2. I’m so tired of living under degenerate marxists. Is there a secession movement in WA? I’m definitely down with that. Health care and now this might be the perfect springboard.

  3. As I have discussed on my blog I think the main problem with the proposed tax is the extent of tax grab that is proposed and the consequent harm to Australia’s reputation as a destination for investment (aggravated by Rudd’s rhetoric about this being a tax that will fall mainly on foreign investors).
    If the proposed tax just replaced existing state royalties in a revenue neutral fashion I don’t think there would be much reason to object.

  4. I’m not an expert in how mining and exploration leases are negotiated so perhaps someone can enlighten me.

    However, I would have thought that exploration and mining rights have already been negotiated with whoever owns the land, and lease payments to the government if its state-owned, or royalties to the Aboriginals if its ‘tribal land’

    Therefore, despite Kevin Rudd’s rhetoric that the mineral wealth belongs to all the Australian people, that’s already been accounted for, and the additional tax is just government sanctioned theft, that can’t possibly be spun as ‘resource rent’. Not unless you admit that the Australian government as landlord have arbitrarily decided to increase the rent.

  5. I read about secession in the Weekend Australian. I think I may have a loophole- whilst the Australian Constitution includes the phrase, “Western Australia”, it doesn’t define it, so if The Kimberley inhabitants called themselves “North-West Australia” and seceded from Western Australia, they might have legal right on their side. None of the States are defined in the constitution- they are simple taken as a given.

  6. I forgot to include that they would then also be nations independent of the commonwealth of australia. At least, I hope so. My idea, the Safety Button, is coming along, so i might soon be rich enough to fund secession movements! (Don’t i wish!)

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